Legislative Audit
February 13, 2026
Senator Jim Petty Members, if you’d begin making your way to your seats, we’re going to get started here just in a second. All right. Welcome everyone. We’re going to call to order the Legislative Joint Audit Committee for Friday, February 13. Chair sees a quorum. The first item on the agenda is the adoption of the January 9, 2026, minutes.
I have a motion and a second. All those in favor, let it be known by aye. Any opposed, same sign. Motion carries. The next item on our agenda, C, is the adoption of reports of the Executive and standing committees. First up is the Executive Committee. And Representative Lundstrum, would you like to share that?
Committee Reports
Representative Robin Lundstrum The Executive Committee met Thursday, February 12, 2026, and adopted the minutes for the meeting held January 8, 2026. Staff reported to the committee the audit and special reports scheduled to be presented to the standing committees and the full Legislative Joint Audit Committee this month. Staff also noted one committee requested a report that is outstanding and currently in progress.
In new business, the committee denied a request for a special report regarding the Ione Fire Department. The committee approved a request to send questions to the Arkansas Department of Health regarding sexual risk avoidance education funds obtained through Title V grants. The committee granted permission to the Arkansas Department of Administrative Services Office of Property Risk to retain the services of a licensed certified public accountant to conduct the OPR annual financial audit.
Staff was instructed to gather information regarding the current caseload of assignments to circuit judges in Benton County Ninth West Judicial District Circuit Court with a focus on how the cases are assigned and the total number of cases assigned to each judge. Staff will report to the committee on the information obtained in the next meeting. With no additional business to discuss, the meeting adjourned. Next meeting will be Thursday, the 12th, 2026, or at the call of the chair. I move to adopt this report.
Senator Jim Petty Members, you’ve heard the report and we have a motion. Do we have a second? Any discussion? If not, all those in favor of adopting the report say aye. Any opposed? Report is adopted.
Next up is the Standing Committee on Counties and Municipalities. And I believe Senator Johnson is going to present that report. Well, you’re not showing up here yet. Have you pressed the button? Oh, yes. There you go, Senator Johnson, you’re recognized.
Senator Mark Johnson Thank you, Mr. Chairman. The standing committee on Counties and Municipalities met on February 12, 2026. Committee adopted the minutes of the meeting held January 8, 2026. The committee was updated on the status of the December 31, 2022, delinquent private water and sewer audits. 19 entities turnback funds were reinstated after all required reports were submitted.
The committee was also updated on the status of the December 31, 2023, delinquent private water and sewer audits. Of the 64 delinquent entities, 59 have filed their reports since the Legislative Joint Auditing Committee meeting held on July 10, 2025. The committee was notified that after staff’s follow-up visit to the City of Adona, The city is now in substantial compliance with municipal accounting laws. Officials from the towns of Denning and Gum Springs were present to address substantial non-compliance with municipal accounting law.
The committee approved a motion to give town officials 60 days to reach compliance as required under Arkansas Code 14-59-117. The committee reviewed 10 deferred reports and 109 current reports. Officials from eight entities were present to address repeat findings. Five previously deferred reports were filed and five were deferred.
Of the 109 current reports reviewed, 15 were referred to prosecuting attorneys and the attorney general, and two were certified to the Governmental Bonding Board. The committee filed 94 current reports and deferred 15 reports to allow officials to answer questions and to provide additional information at a future meeting as requested by the committee. Mr. Chairman, I move for the adoption of this report.
Senator Jim Petty Thank you, Senator Johnson. Members, you’ve heard the report. Do we have a second? Have a second. Any discussion? Seeing none, all those in favor of adopting the report, say aye. Any opposed, same sign. Motion carries. The report is adopted. Next up is the Standing Committee on State Agencies. And I believe Senator McKee is going to recognize that. I’m sorry. I skipped one. Thank you, Mr. White. The standing Committee on Education Institutions. And Representative Duke is going to present that report.
Representative Hope Duke Thank you, Mr. Chair. The committee met Thursday, February 12, 2026, and adopted the minutes from the January 8, 2026, meeting. 31 education audit reports were included on the committee’s agenda for review.
Officials from the Northwest Arkansas Community College and West Memphis School District were present to answer questions from the committee related to repeat findings in the respective audit reports. The audit report for the Cedarville School District contained a finding that was certified to the Governmental Bonding Board and referred to the prosecuting attorney and attorney general. The committee filed the 31 reports that were brought before it. Mr. Chair, I move to adopt this report.
Senator Jim Petty Thank you, Representative Duke. We have a motion. Do we have a second? Have a second. Any discussion? Seeing none, all those in favor say aye. Any opposed? Motion is adopted. Next up now is the standing Committee on State Agencies. And Senator McKee is going to present that report.
Senator Matt McKee Thank you, Mr. Chairman. Ten reports were on the committee’s agenda yesterday. Two deferred reports and two current reports with the following findings were presented. The Department of Human Services reported instances of improper benefit payments to employees from Disaster Supplemental Nutrition Assistance Program and the Medicaid program.
DHS also had a $610,000 warrant that was cashed by someone other than the intended payee and had several issues regarding capital assets. The Department of Parks, Heritage and Tourism reported a loss of receipts at one of its museums and had errors in several of its change funds. The Department Corrections reported unauthorized fuel card purchases by an employee and did not properly test its disaster recovery plan.
The Department Veterans Affairs reported to Legislative Audit that employees at the Fayetteville Veterans Home were paid for time that was not actually worked. The agency also made a duplicate payment to a vendor and did not properly approve over time. In addition, the special report related to law enforcement agencies adoption of racial profiling policies was presented. Various agency staff members were present to report on how the agencies intended to address the audit findings and to answer committee questions. During the meeting, the committee filed the 10 reports. With that, Mr. Chairman, I would move to adopt this report.
Senator Jim Petty Thank you, Senator McKee. We have a motion. Do we have a second? Any discussion? If not, all those in favor of adopting the report say aye. Any opposed? Motion is adopted. Next up on the agenda is the Medicaid subcommittee, which has not met since 2018. And Representative McAlindon is going to present that report. Representative McAlindon, you’re recognized.
Representative Mindy McAlindon Thank you, Chairman. The Medicaid Subcommittee met Thursday, February 12, 2026, and adopted the minutes from its last meeting held November 1, 2018. Legislative Audit staff gave a presentation covering the history of Medicaid subcommittee and Legislative Audit’s role related to Medicaid.
Staff from the Department of Human Services, the Office of Medicaid Inspector General and the Attorney General’s Office gave presentations regarding their respective roles with Medicaid and general information regarding Medicaid. After the presentation, staff members from the four agencies answered questions from the committee.
With no additional business to discuss, the meeting was adjourned. The next meeting of the committee will be held at the call of the chairs. I move for adoption of this report.
Senator Jim Petty Thank you, Representative McAlindon. Do we have a second? Any discussion? I understand that Senator Flippo is prepared to answer any detailed questions if we have any. All right, seeing none, then all those in favor of adopting the report, say aye. Any opposed? Motion is adopted. All right, moving right along on the agenda, the next item is a review of some special reports.
Cleburne County Library Audit
The next item is the regulatory basis financial statements and other reports for Cleburne County for the year ended December 31, 2024. And I believe Allison Polston is going to present here. So, Ms. Allison, you are recognized.
Allison Polston Thank you, Mr. Chair. This presentation covers the financial audit of Cleburne County for the year ended December 31st, 2024. Cleburne County in North Central Arkansas maintains its county seat in Heber Springs and has a population of approximately 7,300 people.
The county is governed by an 11 member quorum court and day-to-day operations are managed by seven elected officials and two full-time employees. For the general road and all other funds combined, assets totaled $23 million while liabilities totaled $1 million at December 31, 2024. Additionally, revenues were $17.9 million and expenditures totaled $13.5 million.
The county judge appoints the five members of the library board, which then appoints the county librarian. The librarian’s job duties include overseeing daily operations of the three library branches within the county, such as hiring and managing library employees, meeting with the library board to discuss budgetary items, and ensuring fiscal responsibility.
The librarian reports directly to the board, but works under the authority of the county judge who has final authority to take official action on issues affecting the library such as approving a budget and hiring and terminating personnel.
Our review of the Cleburne County Library expenses from January 2022 through August 2025 revealed unauthorized and questionable disbursements totaling over $80,000 due to a general lack of oversight within the library, by the library board and by the county. Purchases totaling just over $73,000 were made without a documented business purpose for items such as power tools and batteries, night vision goggles, first aid supplies, home decor, camping supplies, clothing and grocery items that all appear to be for personal use.
It should be noted that of these purchases, items totaling $7,600 were paid by county claim and the remaining $65,000 was paid from accounts held by the county librarian with oversight from the board but outside of county control. We also selected non-consumable purchases totaling $33,000 to cite and we could only account for purchases totaled $2,600.
In addition, undocumented disbursements totaling $5,300 were made from the library account for items purchased from various vendors. Although some of these purchases were from vendors typically used, a business purpose could not be substantiated. Therefore the validity of these purchases could not be determined.
Furthermore, based on an analysis of fuel costs paid by the library compared to mileage recorded in library vehicle service records and the average fuel cost for the review period, an estimated $2,157 in fuel expenses paid by county claim appear to be improper as well.
Library Director Zackery Cothren, who is responsible for the purchases mentioned, was placed on administrative leave in June of last year. Subsequent to an investigation by the Arkansas State Police and the 16th Judicial District Prosecuting Attorney, Cothern was charged with felony theft of property and abuse of office on September 11 and resigned from his position the following day.
This matter was referred to the 16th Judicial District Prosecuting Attorney and the Attorney General. Mr. Chair, this concludes my presentation. County officials are here to answer committee questions. Thank you.
Senator Jim Petty Thank you Ms. Polston. Committee, you’ve heard the report and we do have representatives here from Cleburne County available to answer any questions. Are there any questions for staff or any witnesses that are here? Okay, seeing none, do I have a motion to file the report? I have a motion and a second. Any discussion on the motion? If not, all those in favor say aye. Any opposed? Motion passes.
Charles W Donaldson Scholars Academy Follow-up
All right, next up is the special report for the review of scholarships awarded, expenditures and grants received by the University of Arkansas Little Rock Charles W. Donaldson Scholars Academy for the 10 year period. And members, just as a reminder, this was a special report request. And maybe for those that were not here last month or those that are online that don’t have the benefit of the history from our last meeting, we had an extensive conversation, a lot of questions around this.
And I think probably generally speaking, the consensus is things might have been run differently now. But the folks that were involved in this are no longer at these organizations. There have been improvements and changes made through the years. And so with that, there are a number of people at your request that have been here today, that are here today that are here to answer any further questions that we might have. At this point, Charlie Camp is going to be recognized to present the report.
Charlie Camp This report was issued in response to a legislative request for Legislative Audit to conduct a review of scholarships awarded, expenditures made, and grants received by the Charles W. Donaldson Scholars Academy at the University of Arkansas Little Rock. This report was initially presented at the meeting of this committee held last month and deferred to allow for further discussion.
The goals of this program include providing preparation and application assistance for the ACT, increasing student confidence regarding college attendance and graduation, building community and relationships, and providing financial support through a $2,500 scholarship renewable annually up to four years. The program functioned as a collaborative effort among UALR, Philander Smith, and the Pulaski Technical College, with the Pulaski County Special School District providing $10 million in funding.
Over the life of the program, the majority of funds were spent for salaries, wages, and fringe benefits, scholarships, and administrative and other expenses. During the review period, the program awarded scholarships totaling 1.87 million to 379 students, 16 of whom graduated from Philander Smith, UALR, or UAPTC. We tested 39 students who received scholarships and noted 56 instances in which 32 of these students were ineligible.
Scholarships awarded to ineligible students at Philander Smith and UALR totaled over $111,000 or 32% of the roughly $350,000 tested. Scholarship awards tested at UAPTC revealed no exceptions. Additionally, we tested 147 disbursements tolling 1.91 million and noted 124 exceptions regarding processing and documenting of disbursement.
A $50,000 grant from the Central Arkansas Planning and Development District was expended in accordance with the grant and it appears the court monitored the expenditure of the remaining $10 million. Program expenditures included one international trip and several trips within the United States, as well as many cultural and social activities for the programs and participants.
Program activity was limited beginning in 2020 due to the COVID 19 pandemic. And in June 2024, the program ceased to operate. Of remaining funds totaling 1.6 million, 80% was returned to Pulaski Special School District, and 20% was returned to the Jacksonville North Pulaski School District. Due to the cessation of the program, all employees materially involved in the program including the director were no longer employed by UALR and were unavailable for interview at the time of the review.
Therefore we relied solely on the documentation provided by UALR and limited knowledge of current employees to obtain the information provided in the report. This slide presents program expenditures by higher education institution for the life of the program, which were provided by UALR. Expenditures for UALR totaled just over $8 million, while expenditures for Philander Smith and UAPTC totaled $262,000 and $61,000 respectively.
In response to requests from this committee at its meeting held last month, ALA emailed to committee members the court order issued by the U.S. District Court for the Eastern District of Arkansas, as well as an example of a progress report submitted by the program to the court. Mr. Chair, this concludes my presentation. Representatives from UALR, Philander Smith, and UAPTC are present to respond to any questions.
Senator Jim Petty All right, thank you, Mr. Camp. And again, as a matter of emphasis for maybe those that don’t have the history here, this was really kind of a result of the long-standing desegregation and other issues in this school district. It was created, in essence, through a federal court and administered and monitored through the federal court with the assistance of these institutions.
So we do have a number of representatives here. And because we have so many, I think we’re going to limit it to one organization at a time if possible to not crowd that table. So I see a couple here. So, Senator Johnson, is this for a particular group or organization or is this your staff?
Senator Mark Johnson Mr. Chairman, I really would like to hear from all of the schools involved, but not one in particular. I just wanted to see– it seems the fact that you may have multiple– and maybe this is a question for Mr. Camp.
But if you have multiple institutions involved in overseeing a program, then you really have nobody overseeing the program. Mr. Camp, is that perhaps a fair situation because you’ve spread the administration of this out over three or four higher education institutions? In other words, who’s guarding the hen house?
Charlie Camp The administration of the program was handled at UALR through the Donaldson Program Academy.
Senator Mark Johnson Okay, I mean, I’m not picking on UALR, but if there is responsibility, then I guess it goes back to UALR. Is that fair to say?
Charlie Camp They were custodian of the funds. And the director and other employees of the program were employees of UALR.
Senator Mark Johnson I’m particularly troubled by– and we’ve seen this. I mean, we just had a librarian who’s probably going to go to jail for what he did. But then you’ve got something where you create a program, and people, the salaries, administrative costs far exceed the scholarships. And I’m for more and more scholarships, especially for people that are need-based.
When people can figure out a way to create an institution and a bureaucracy and get paid for it, and then less of that money actually goes to those beneficiaries. And I think there’s a lot bigger problem here. To me it’s as criminal as a librarian buying toys for himself and putting gas in his car. If witnesses come up, I’ll just ask them to speak to that. And I guess UALR is the one that I would address that to.
Senator Jim Petty Thank you, Senator Johnson. Just a couple of comments to your statement. And I think we can all agree that there would have been different results, but this was created very, very, very, broadly by a federal court and monitored. The reports that you received subsequent to our last meeting, very detailed, I think, 20 or 25 pages of reporting to the court.
And so whether or not the federal judge was monitoring as closely as maybe we would or not is obviously open for debate. But these organizations were asked to– they didn’t come with an idea they were asked to administer this program. And so I think that we can all agree that it should have been done or could have been done a little differently. And at first, I had the same response as you.
And the more information I read about and the more information that I received and the more broadly I saw the program, it wasn’t just scholarships. It was creating relationships and creating cultural experiences for those prospective college students that might not otherwise have had that opportunity. So it was very broad.
And even staff, and I don’t want to speak for staff or Mr. Camp, but even in the review, other than the missing maybe support of invoices on a certain number of invoices, there was not anything found to be outside the scope, the very broad scope of that. Would you care to comment on that, Mr. Camp?
Charlie Camp We really couldn’t speak to whether the expenditures were improper or not because the scope was so broad. So I believe what you said, Mr. Chair, would be accurate.
Senator Jim Petty Representative Beaty, you are recognized.
Representative Howard Beaty Question for staff or for the chair. Do we have anyone from the school district that’s here that might wish to speak on the record on this audit? I would like to hear from their point of view.
Senator Jim Petty Representative Beaty, no sir, we do not have anyone from the school districts who are here available to speak on that behalf.
Representative Howard Beaty I mean, I just think if the program came from and was funded out of their proceeds and it was something that was to benefit and correct some of the wrongs that were there on the district side, just how involved were they to judge and see how this program operated. And I would like to hear their perspective on it. So I wish they were here. But with that, I’ll get out of the queue. Thank you.
Senator Jim Petty All right, anybody else? I don’t see anybody else in the queue. I’m not encouraging anybody either way. With that and the queue clear, do I have a motion to file this report? I have a motion. Do I have a second? Have a motion and a second. Any discussion on that motion? If not, all those in favor say aye. Any opposed? Motion passes. The report is filed.
All right, members, that concludes the review of the reports. And under other business, the next meeting of the Legislative Joint Audit Committee will be held on March 12th and 13th, 2026. With that, we are adjourned.
